Interferon-a (IFN) is currently the primary choice of treatment for chronic viral hepatitis, however, more than 60% of patients respond poorly and heavy drinkers do not respond. Our laboratory is focusing on the host factors that are involved in suppression of IFN signaling and resistance to therapy. We have previously demonstrated that IFN-a signaling in the liver is suppressed by multiple host factors, including IL-1, IL-10, and alcohol drinking. In this year, we have identified that another host factor, TNFa, is also involved in resistance to IFN therapy. We demonstrate that injection of TNFa suppresses IFN-a signaling and markedly induces expression of suppressor of cytokine signaling 3 (SOCS3) and SH2 containing protein-tyrosine phosphatase 2 (SHP2) in the liver. TNFa induction of SOCS3 and SHP2 remain unchanged while induction of STAT1 protein expression is completely abolished in IL-6-deficient mice. Immunoprecipitation experiments show that injection of TNFa increases SHP2 association with JAKs. Overexpression of SOCS3 and SHP2 inhibits IFN-a signaling in hepatic cells. Injection of carbon tetrachloride, which is known to induce TNFa in the liver, attenuates IFN-a signaling in the liver. This attenuation is also observed in TNFa receptor II- (TNFR2) deficient mice but markedly diminished in TNFR1-deficient mice. Taken together, our findings suggest that TNFa may be involved in resistance to IFN-a therapy by induction of SOCS3 and SHP2, and these proteins could be potential therapeutic targets for improving the efficacy of IFN-a therapy. In addition, we have also examined the expression of IFN signaling components in alcoholic liver disease. Our results show that expression of STAT2 and PKR is downregulated in human alcoholic liver tissue, which could contribute to the resistance to IFN therapy in alcoholics. Currently, we are continuing to examine other host factors that are involved in suppression of IFN signaling and limiting the effectiveness of IFN therapy in the liver.